If You're Going Through Hell, Keep Going
Digitalizing My Paper Journal:
Excerpt #3:
There were a few trades that I did not record live when I took them. Looking back at how I got stopped out, this was an important lesson learned. Extreme market volatility is not your friend, despite going in the direction of the longer term trend.
Trade #1: USDCHF
Excerpt #1:
I'm starting this trading journal because I feel like I'm going through hell. And because I'm tired. It feels like I'm just bleeding money. The cycle of profit and loss keeps balancing each other out and I'm getting nowhere. Admittedly, I've never been too serious with my trading and I never took a serious approach to adopting my strategy.
Excerpt #2:
I just finished another podcast from Chat With Traders. My takeaways from the interview with Peter Brandt:
- Don't trade with trailing stops because you should trade the market, not your equity.
- A similar viewpoint was made by Tom Dante about moving stop loss to breakeven (you're just trading your profits).
Another amazing quote I heard from Tom Basso:
"Good trading is following your strategy. Good trading is not making money, bad trading is not losing money."
Excerpt #3:
There were a few trades that I did not record live when I took them. Looking back at how I got stopped out, this was an important lesson learned. Extreme market volatility is not your friend, despite going in the direction of the longer term trend.
Trade #1: USDCHF
- Buy @ 1.0114, Stopped out @ 1.0049
- I thought this trade had a good signal. The weekly level was held supported yet fundamental news on trade tensions with China sent the USD lower. I don't consider this trade unavoidable. It just didn't work out.
Trade #2: Buy SP500 @ 2866.47, Stopped out @ 2830.50
- Admittedly, this trade was entered in haste. Looking back in hindsight, it wasn't the clearest signal.
- Over on the daily timeframe, this index made two dojis. I considered that the selling pressure was exhausted. However, there really is just a massive indecision. Given how fundamentally driven the current environment is, I should have waited for a clear signal confirming that there was indeed buying pressure.
- LESSON: PATIENCE - CASH IS A POSITION!
Trade #3: Buy AUD @ 0.68868, Take profit @ 0.69204
- Finally a trade that worked out. AUDUSD appeared to be oversold and has finally bottomed out on the 4-hour timeframe. Price made a bounce and failed to break lower. I took a long position with a 1:1 reward to risk ratio.
- Reflection: I'm better at predicting shorter term moves. I have a much harder time trying to ride longer term trades.
Excerpt #4:
Last week was a big disappointment. I admittedly overtraded. After starting the week with an amazing AUDUSD trade, I admittedly overtraded for the subsequent trades. I admittedly took a less than optimal trade. While I had a terrible week in the markets, my mentality improved playing poker. I won't go into full detail of my poker hobby, but I do play poker.
After hitting a 60% cash-out rate in single table SNGs, I took a closer look at my stats. I had a flop rate of less than 20%, but a showdown winning percentage of over 85%. Based on my gameplay, it appears that I like to wait for the right moment. If the moment is right where I have a very high probability of winning, I will go to showdown. Otherwise, I will muck my hand early and wait for the next opportunity.
My takeaways from poker:
- Time the hands you play. You don't need to play every hand and you should only play the hands if the position and conditions are right.
- You have a high showdown win rate. when you're in a hand, you're committed. Otherwise, get out early. Fold as soon as you run out of outs.
- Stack preservation is important. When you go all in, you're the favorite. This is not a game about short term wins, it's a game to survive.
Next Step: formulate your entry rules!